CLOs

Despite perceptions that smaller companies are riskier, they pose less risk to investors. Realized loss rates are lower, and they deliver higher returns.

The U.S. economy is relatively insulated from the events unfolding in Eastern Europe. Western Europe may be affected indirectly by higher energy prices.

The transaction, expected to close on March 2, has a non-call period end date of two years from the expected closing, a reinvestment period end date of April 15, 2026.

A broader investor base, rising inflation and higher interest rates are likely to result in significant demand for CLO bonds, which have experienced few defaults.

Deerpath’s average portfolio turnover rate of 37.8% over the past 12 months was higher than the 25.3% of all CLO 2.0 transactions.

While the indicative portfolio has an average credit quality of ‘B’ or ‘B-,’ Fitch also points out that the class A-1 notes have a 43.0% credit enhancement level.

The size of the current deal stems mostly from the ‘AAA’ piece, which was $210 million, compared to $162 million in the last ABS. Earlier deals hovered around $250 million.

Collateralized loan obligations may have to wait until 2022, because the market is seeking price discovery -- but has little incentive to jump first.

One issuer says inclusion of enhanced reporting is the first step toward putting the entire RMBS platform on the blockchain.

BDS 2021-FL9 is allowed to be fully collateralized by multifamily or manufactured housing properties, although it has concentration limits on other property types.